The nightmare never seems to end for Toyota (TM). In a letter to the National Highway Traffic Safety Administration, the Japanese car company requested a meeting about a stalling issue on 1.2 million Corollas and Matrix models. The issue was raised in a March 2nd notice to the agency.The Detroit Free Press published a portion of a letter from Toyota to the agency: "Toyota does not believe that the alleged defect creates an unreasonable risk to motor vehicle safety. We understand that some customers have been inconvenienced by engine (control module) failure, and some have reported engine stalling." The National Highway Traffic Safety Administration said it has received 26 complaints about the problem.
Toyota says that the stalling problem could involve 1.19 million Corolla and Matrix models from the 2005, 2006 and 2007 model years. But it has has not said it will recall the cars, which would add to the company's image as a firm that does not put safety ahead of profit. Toyota has been trying hard to change its image from a mass producer of vehicles to a corporation that will lower its sales targets in the name of the quality and safety. If the Corollas and Matrix models only have a potential problem, why would Toyota risk another round of criticism?
The news may also reflect poorly on the National Highway Traffic Safety Administration which many members of Congress have criticized for being asleep at the wheel as the number of complaints about defects in Toyota vehicles rose. The latest problem with Toyota Corollas and Matrix vehicles will raise the question again. The stalling question was first brought to its attention in 2006.
No matter what the outcome of the Toyota revelation and whether the National Highway Traffic Safety Administration forces the Japanese company to recall the 1.2 million cars, the world's largest car company's image will take another hit, just as it appears that its March sales were rebounding from low levels in February. How much damage can a brand take before the consumer abandons it en masse?
Take the first steps to building your portfolio.View Course »